This refers to the NRC inspection conducted on April 25, 1997,
at the above address in Warfordsburg, Pennsylvania. During the inspection,
violations of NRC requirements were identified, as described in the NRC
inspection report transmitted with our letter, dated May 15, 1997.
In the May 15, 1997 letter, the NRC provided you an opportunity
to either respond in writing to the apparent violations addressed in the
inspection report or request a predecisional enforcement conference. You
responded to the apparent violations in a May 31, 1997 letter to the NRC.

Based on the information developed during the inspection and the information
you provided in your May 31, 1997 response, the NRC has determined that
two violations of NRC requirements occurred. The violations are cited
in the enclosed Notice of Violation (Notice) and the circumstances surrounding
the violations are described in detail in the subject inspection report.
The most significant violation (Violation A in the enclosed Notice), involves
the failure to control and maintain constant surveillance of three gauges
containing licensed material not in storage in controlled areas at your
facility in Warfordsburg. In one case, the inspector walked unchallenged
to the second floor where he found two unattended portable gauges (one
containing 8.3 millicuries of cesium 137, and the other containing 8.3
millicuries of cesium 137 and 40 millicuries of americium 241), in a storage
room with the door unlocked and open. Also, the inspector was shown an
unattended asphalt gauge containing 100 millicuries of americium 241 in
the first floor testing room. The door to the first floor testing room
was also open and not locked.

This violation represents a significant regulatory concern because the
failure to maintain appropriate security of material could result in the
damage, loss, or theft to the gauges. The violation is classified at Severity
Level III in accordance with the "General Statement of Policy and Procedure
for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.

In accordance with the Enforcement Policy, a base civil penalty in the
amount of $2,750 is considered for a Severity Level III violation. Because
your facility has not been the subject of an escalated enforcement action
within the last two years, the NRC considered whether credit was warranted
for
Corrective Action
in accordance with the civil penalty assessment
process in Section VI.B.2 of the Enforcement Policy. Credit for corrective
actions is warranted because your corrective action was prompt and comprehensive.
Specifically, as noted in your May 31, 1997 letter, you have decided to
store all gauges in your storage room, and improvements have been made
to ensure the door to the room is closed and locked at all times, including
installation of a self-closing and locking unit on the door to ensure
limited access.

Therefore, to encourage prompt and comprehensive correction of violations,
I have been authorized not to propose a civil penalty in this case. However,
similar violations in the future could result in further escalated enforcement
action.

In addition to Violation A, one other violation of NRC requirements was
also identified and is classified individually at Severity Level IV. Another
apparent violation in the inspection report, involving not providing training
to hazmat employees, has been withdrawn based on your submittal of information
in your May 31, 1997 letter.

The NRC has concluded that information regarding the reasons for the
violations, the corrective actions taken and planned to correct the violations
and prevent recurrence, and the date when full compliance will be achieved
is already adequately addressed on the docket in your May 31, 1997 letter
to the NRC. Therefore, you are not required to respond to this letter
unless the description therein does not accurately reflect your corrective
actions or your position. In that case, or if you choose to provide additional
information, you should follow the instructions specified in the enclosed
Notice.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy
of this letter and its enclosure, will be placed in the NRC Public Document
Room (PDR).

Sincerely,
ORIGINAL SIGNED BY
WILLIAM L. AXELSON FOR
Hubert J. Miller
Regional Administrator

During an NRC inspection conducted on April 25, 1997, violations
of NRC requirements were identified. In accordance with the "General Statement
of Policy and Procedure for NRC Enforcement Actions," (Enforcement Policy)
NUREG-1600, the violations are listed below:

A. 10 CFR 20.1801 requires that the licensee secure from unauthorized
removal or access licensed materials that are stored in controlled or
unrestricted areas. 10 CFR 20.1802 requires that the licensee control
and maintain constant surveillance of licensed material that is in a controlled
or unrestricted area and that is not in storage. As defined in 10 CFR
20.1003, controlled area means an area, outside of a restricted
area but inside the site boundary, access to which can be limited by the
licensee for any reason; and unrestricted area means an area,
access to which is neither limited nor controlled by the licensee.

Contrary to the above, on April 25, 1997, the NRC observed that the
licensee did not secure from unauthorized removal or limit access to
three gauges containing NRC licensed material (millicurie quantities
of cesium-137 and/or americium-241), two of which were located in a
second floor storage room, and one of which was located in a first floor
sample analysis room, at the licensee's facility at Pigeon Cove Road,
Route 1, Warfordsburg, Pennsylvania, which are controlled areas, nor
did the licensee control and maintain constant surveillance of this
licensed material. (01013)

This is a Severity Level III violation (Supplement IV).

B. 10 CFR 71.5(a) requires that a licensee who transports licensed
material outside of the site of usage, as specified in the NRC license,
or where transport is on public highways, or who delivers licensed material
to a carrier for transport, comply with the applicable requirements of
the regulations appropriate to the mode of transport of the Department
of Transportation (DOT) in 49 CFR Parts 170 through 189.

49 CFR 177.817(a) requires that a carrier not transport a hazardous
material unless it is accompanied by a shipping paper prepared in accordance
with 49 CFR 172.200-203. Pursuant to 49 CFR 172.101, radioactive
material is classified as hazardous material.

Contrary to the above, as of April 25, 1997, the licensee routinely
transported portable gauges (containing 8.3 millicuries of cesium-137
and 40 millicuries of americium-241) outside the confines of its plant
without a shipping paper. (02014)

This is a Severity Level IV violation (Supplement V).

The NRC has concluded that information regarding the reason for the violations,
the corrective actions taken and planned to correct the violations and
prevent recurrence, and the date when full compliance will be achieved
is already adequately addressed on the docket in the licensee's May 31,
1997 letter to the NRC. However, you are required to submit a written
statement or explanation pursuant to 10 CFR 2.201 if the description
therein does not accurately reflect your corrective actions or your position.
In that case, or if you choose to respond, clearly mark your response
as a "Reply to a Notice of Violation," and send it to the U.S. Nuclear
Regulatory Commission, ATTN: Document Control Desk, Washington,
D.C. 20555 with a copy to the Regional Administrator, Region I, and a
copy to the NRC Resident Inspector at the facility that is the subject
of this Notice, within 30 days of the date of the letter transmitting
this Notice of Violation (Notice).